The Supreme Court on Wednesday directed the Directorate of Enforcement (ED) to constitute a dedicated Special Investigation Team (SIT) to comprehensively investigate allegations of large-scale bank fraud involving Reliance Communications Limited (RCOM), its group entities, and industrialist Anil Ambani.
The Bench of Chief Justice of India Surya Kant, Justice Joymalya Bagchi, and Justice Vipul M Pancholi underscored the need for an intensified and time-bound probe, observing that the complexity and magnitude of the alleged financial improprieties warranted supervision by senior officers within the central agency.
The Court emphasised that the investigation must be pursued with institutional seriousness and taken to its logical conclusion, in keeping with the statutory objectives of the Prevention of Money Laundering Act (PMLA), 2002.
The Bench also formally recorded an undertaking on behalf of Anil Ambani that he would not travel abroad without prior permission of the Court. This assurance was noted against the backdrop of apprehensions expressed regarding potential flight risk, with the Court directing that all lawful preventive measures be adopted to ensure that the investigation remains unhindered.
The Apex Court further issued specific directions to the Central Bureau of Investigation (CBI) to probe the possible role of public sector bank officials in the alleged fraud, observing that it was imperative for the CBI to examine whether loan disbursements were made in violation of banking norms or through collusion, conspiracy, or abuse of official position.
The Bench made it clear that the investigation must extend to identifying any nexus between corporate borrowers and bank functionaries, invoking principles governing criminal conspiracy under Section 120B of the Indian Penal Code and offences under the Prevention of Corruption Act, 1988, wherever applicable.
The Court took note of submissions alleging unexplained delays in investigative action by both the ED and the CBI, particularly in view of the scale of public funds involved. Stressing the need for institutional impartiality and professional detachment, the Bench directed both agencies to file detailed status reports within four weeks and indicated that periodic monitoring would continue thereafter.
During the course of the hearing, the Court orally observed that allegations involving siphoning and diversion of thousands of crores of rupees of public money could not be treated as routine commercial defaults. The Bench reiterated that investigative agencies were expected to act independently, fairly, and with requisite forensic expertise, especially in cases implicating systemic risks to the banking sector.
The proceedings arose from a petition filed by former Union Secretary EAS Sarma, who has sought a court-monitored investigation into what has been described as one of the largest corporate frauds in recent years. The petitioner contended that despite the registration of an FIR by the CBI in August 2025, the investigation has progressed at an unacceptably slow pace, with only limited arrests effected thus far. It was argued that the scope of the FIR and the connected money laundering proceedings under the PMLA address only a fraction of the alleged wrongdoing.
Counsel appearing for Anil Ambani and the Anil Dhirubhai Ambani Group disputed the characterisation of the transactions as siphoning of funds, maintaining that financial distress and corporate insolvency could not, by themselves, be equated with criminal diversion. While not opposing the constitution of an SIT, it was suggested that an expert-driven examination by financial and regulatory authorities could provide a more accurate assessment than purely prosecutorial action.
These submissions were contested by the Union of India, which relied upon forensic audit reports commissioned by the lending banks. According to the Union, independent auditors had recorded findings indicative of deliberate fund diversion, thereby justifying criminal investigation and prosecution. The Court observed that where intent to siphon public funds is prima facie established, the invocation of criminal law cannot be excluded.
The Union further informed the Court that the insolvency dimension of the matter was also under active consideration under the Insolvency and Bankruptcy Code, 2016. The Bench, however, expressed concern over the conduct of the resolution professional in the corporate insolvency resolution process, noting that the record reflected deficiencies warranting scrutiny.
As per the pleadings, RCOM and its subsidiaries, including Reliance Infratel and Reliance Telecom, availed loans totalling approximately ₹31,580 crore between 2013 and 2017 from a consortium of banks led by the State Bank of India. A forensic audit reportedly revealed large-scale diversion of funds, including repayment of unrelated liabilities, transfers to related parties, investments in financial instruments followed by immediate liquidation, and complex circular transactions allegedly designed to mask evergreening of loans.
The petition further highlights a nearly five-year delay between the submission of the forensic audit report to SBI in October 2020 and the filing of a formal complaint in August 2025. This delay, it is argued, gives rise to a prima facie inference of institutional lapse and possible complicity, including regulatory inaction.
The Court was informed that only sustained judicial oversight could ensure a thorough, transparent, and accountable investigation into a matter involving extensive exposure of public funds and potential systemic banking failures. The Bench indicated its expectation that both the ED and the CBI would discharge their statutory mandates with diligence and integrity.
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